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Advisor

2020 Blueprint for Breaking even

1) don't owe any money...cash is king. Stop thinking about buying land, and maybe think about selling a piece to retire your debt and get some operating money.

2) get realistic....get lean, sell stuff you don't need..RV's, boats, sports cars, etc. One lending officer told me 20 years ago that he asked a guy to sell his motorhome and when he refused, he asked him are you going to be a full time farmer, or a full time traveler? The guy got the message and sold it.

3)make a budget and follow it.

$3 Corn, 180 bushel yield....$540 gross

Rent $200

Fert $100

Seed $50

Chem $25

Crop ins $5

Drying $15

Custom Hire $120

Overhead $25

$540 of expenses...break even, and government payments are for your living expenses.....quit complaining about all the people on government support, too. Look in the mirror.

Soybeans $8  50 bushel yield $400 gross income

Rent $200

Fert $25

Seed $40

Chemicals $25

Crop ins $5

Custom hire value $80

Overhead $25

Total $400

again...income and expense balance out, use government payments for living expense, or get off farm employment to ride out the next couple of years.

Conventional corn seed,  gmo soybean seed, rotate chemicals, if you can't get these prices on inputs, go together with the neighbor with the sharp pencil and good negotiating skills and have him help you. These are realistic prices and what you need to stay in business and survive. It's ugly out there.

Trying to help you all out here, not trying to ridicule or make fun of anyone. It's 1980 all over again. Punch some more notches in your belt and get lean. Tough times don't last , but tough people do. 

 

2 Replies
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Honored Advisor

Re: 2020 Blueprint for Breaking even

RSBS, those are solid numbers to give everyone a road map...some will take detours and the GPS will reroute them, but will help if they don`t take too many scenic roads  Smiley Happy

Where I stray my seedcorn costs are $100/acre, fertilizer a bit higher, crop insurance about 5 times higher but I have a $600 some/acre,   revenue guarantee 85%, enterprize units, fall harvest.  Though if you were ever going to drop the fall harvest RA price this is probably a "safe year" to do it  Smiley Sad 

It`s Easter Sunday 8" of snow coming, next week in the teens for temperature at night, Mike Hoffman on USFR calls for below normal temps next 30 days...nuther damned year we won`t be out of the starting blocks early.

Probably $2.50 corn and 3 billion carryover next year.  I`ve been saying for going on 5 years now "we`ll get through THIS year...but I`m worried about NEXT year"  after 5 years of that sooner or later the piston rod goes through the engine block   Smiley Happy

I guess RA crop insurance and PLC farm program is my floatie as i`m threading water in the middle of the Atlantic.  But I worry about NEXT year   Smiley Happy

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Highlighted
Advisor

Re: 2020 Blueprint for Breaking even

You probably are right about the revenue insurance paying off big again this year. I went max last year and got my premium back, plus the premium again for a 100 percent return on the money "invested".  if my crop insurance claim would have been settled timely, and I would have known how much I actually was going to get from the buyup RAMP insurance, I would have gone that route this year too, but missed that boat. I should have spend more time looking at it , but that is now hindsight.

Of course, that is a sure outlay of another $30 an acre over my spartan budget , and if I hit on 225 bushel corn and $3.25  then my way  will mean $30 more of profit for me. Who needs Vegas when you can gamble like we do?

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